tv Squawk Box CNBC September 3, 2013 6:00am-9:01am EDT
and andrew ross sorkin. september is starting off strong. we have a flurry of headlines this morning. let's get right down to business. welcome back, everybody. it is time to go. nokia, first of all, is selling its hand set business to microsoft for $7.2 billion. when this deal closes, nokia's ceo stephen elop will rejoin microsoft as head of the mobile services business. he had been rumored to be a possible replacement for microsoft's retiring ceo steve ballmer. more from jon fortt on that in a moment, including his interview from earlier this morning with ballmer himself. in other deal news, verizon agreed to pay $130 billion to buy vodafone out of its u.s. wireless business. kayla tashe will join us with more. cbs and time warner cable reached a deal to end a month long blackout. the terms of the deal were not disclosed, but the two sides, as you probably know, have been at
odds since the beginning of august, that's when they were blacked out on time warner systems in los angeles, new york and dallas and smaller market as well. we'll talk to a media analyst in the next half hour to see who came out as the big winner on this. cbs, kind of thumping its chest. we'll talk more about that. first, back to the tech story overnight out of europe, jon fortt talked to microsoft ceo steve ballmer an hour ago and joins us from san jose with the highlights. this caught a lot of people by surprise, jon. >> not entirely surprising that microsoft would look at perhaps stephen elop as a ceo candidate, but the timing of picking up all of nokia's devices and services business quite surprising. all the talk on twitter also over in germany where there is a major tech show kicking off that will be following throughout the week. i spoke to steve ballmer about an hour ago, first on cnbc
interview. we talked about the join up of the two companies, we talked about stephen elop. listen to what steve ballmer had to say about the impact on the windows ecosystem. >> we think our acquisition of nokia will actually create interesting opportunities for other windows devicemakers, not just on the phone side, but particularly on the tablet and pc side, where companies like dell and lenovo and hp and many, many others have been fundamental to our success. what is good for windows phone, we think will be good for the overall windows ecosystem. >> so trying to make it very clear there, he's not trying to block out other hardware manufacturers for working with windows phone or windows 8. still wants to welcome them. that strategy reminiscent of what google tried to do post the motorola mobility acquisition. i asked him specifically about what microsoft's getting with stephen elop, the ceo of nokia until this transaction was
announced, he has stepped down to a senior vice president position over the devices and services group. microsoft plans to put him in charge of all of hardware once this deal closes, which they hope will happen before april. that would be not just the existing nokia business, also xbox and any other hardware that microsoft is working on. ballmer said he thinks very highly of elop, that obviously he knew him when elop worked for him three years ago, but now has gotten to know him better as a partner. i asked him specifically whether he expects elop to be a candidate for ceo. he was very politic about that question, saying the board will have a private process, but implied, of course, he, among others inside and outside will be considered. guys? >> i got two questions for you this morning. one is, spending $7 billion to buy elop seems look a crazy idea, but if you don't take elop, in a year from now, does elop leave and what does that mean? >> well, you got to think it would be a mess in a way if they
don't take elop after this because he knows nokia's business better than anybody, and what microsoft is doing, taking on the 32,000 workers with devices and services is expending their workforce by a third. that's a lot. and it is a geographically distributed third that they're taking on. it is also quite a bit of revenue, very little profit, but besides just nokia's business and stephen elop, microsoft is also getting access to a lot of patents in this transaction. that could turn out to be key. nokia has a number of patents in phone design itself and i just talked to an analyst this morning who is over in europe who says this changes the economics of smartphones for microsoft. they're going to be able to make a cheaper smartphone than anybody else. i want to mention, in just a few minutes, in 25 minutes or so, i'm going to have a first on cnbc interview with the interim president and the cfo of nokia. he's going to join us and talk about things from nokia's
perspective. >> jon, what kind of job did elop do at nokia? because nokia shares suffered while he was there. what do you think of his leadership there? >> they did. you know, becky, when he first came in, he had this infamous burning platform memo, which a lot of people interpreted as the new ceo is coming in and saying we're screwed. it sent the stock tumbling. a lot of people criticized him for that. he basically said we're going to bet it all on windows phone, but strategically, it doesn't seem to have been that bad a move. and, of course, it caused their business to tumble quickly, but they had a very clear view of what their strategy was. unlike blackberry, which seemed to sort of dither for a while, fiddle while rome burned, nokia was focused on the strategy that led them to this point. if you like that strategy, it made sense. if you think that elop was a manchurian candidate who destroyed nokia so microsoft could buy it, then, you know,
still not such a great deal. >> overall, the shares, how did they do over the three years he was there. i'm trying to look that up right now. >> down quite a bit. i know that i've seen the 85% number as far as how far down nokia shares have gone. i don't think that's specifically from elop's tenure, that might be from the peak. but nokia used to -- >> looks like they were $12 or $14 down to $3.90 now. >> i'm sorry, jon, i'm going to interrupt, the whole thing seems crazy. 80% of microsoft's business is already on nokia phones. so what -- what are you really buying here? in truth? beyond the patents. i get the patents. you're not getting maps. maps is staying at nokia. that's one of the few things they have that i see as a value in a race with google. do you see any strategy shift, the idea they'll be able to act faster. they're already in cahoots together to begin with. >> they're getting a ten-year
license with the option to renew for perpetual license for the price, for both maps and the other technology that they're currently using. they get that. they're getting access to the patents also. you know, in terms of -- in terms of hardware, they're getting to reaccelerate potentially the window phone ecosystem. nokia has done better than htc, better than samsung, now as part of microsoft, arguably, they get to do that. if you don't like the google motorola deal, chances are -- that doesn't make sense, chances are this one doesn't make that much sense to you either because the rational behind both between patents and the hardware business and pushing it all forward quickly is pretty similar. >> this is, to me, this tells me that mobile devices are going to be important. right? >> yes, indeed. this is all -- this is all -- you can see it through the lens of reaction of what apple did
combining hardware and software and moving forward quickly. >> microsoft, i quickly saw, like a $7 billion goodwill writedown. i'm not sure when. like how long -- what do you give it? a couple of -- >> 24 months. >> i want to watch. i don't want to watch -- i like to watch. but i want to watch. i want the watch. i want a mobile i-watch m mapping -- you should have seen my global mapping going out to the hamptons. rerouting me, traffic, construction. >> did it work? >> it is unbelievable. >> i did the same thing. >> it is so good, i even did a welcome back. >> thank you. >> you didn't sit in traffic? >> it reroutes you. and people -- you know, in the old days, it is like i'll leave now, i'm not sure when i'll get there, depends on traffic. you have the -- the arrival time and it will change depending on whether someone, you know,
someone, you know, gets a flat tire, it is amazing. i want to be dick tracy too. >> you want to -- >> i can already do that, i don't wear a watch. a little bit of corporate news. >> you're going to intro that cfo, the nokia cfo. did you hear jon. jon, say it for him again. just so -- he's gone. all right. you want to try it? >> we can practice. >> timo ihamuotila. >> they just said forget it. >> we have other very important news beyond the corporate world this morning, other big top story, the debate in washington over how the u.s. can handle the situation in syria. today, the senate foreign relations committee will be hearing testimony on why the obama administration thinks it is critical to act. secretary of state john kerry and defense secretary chuck hagel will be appearing before that panel. john harwood joins us this morning from oklahoma where he's
been traveling with congressman tim cole. good morning to you. >> in oklahoma, because the president of the united states has put the fate of the policy in syria in the hands of members of congress. you mentioned the senate foreign relations committee, it seems pretty likely that the democratic senate will give the president the authority that he seeks to act in syria. the house is much more of a question. this is a district in -- outside of oklahoma city that voted 2-1 against president obama, tom cole, the congressman, is supportive of the military, has an air force base in the district, but he's got to hear the case for why we should commit u.s. forces to this enterprise, and even if it is not boots on the ground, even if it is just cruise missiles, this is a pretty grave decision for members of congress, republican and democrat alike, and i'm going to be following tom cole
meeting with the chamber of commerce in this building behind me. he's going to go to the air force base, talk to officers there and then have a town meeting tonight and we'll get to take some of the temperature of exactly how much the president is going to be able to get congress to go along with what he wants to do. >> what is the timing of all this. congress is not back in session until next week. is there a chance they get brought back early and once they do, then what happens? >> no, they won't get brought back early. what is happening early is the senate committee hearings i would expect that the senate would vote first when we get back. they reconvene on the night. and the house debate will begin. don't know how long that is going to last. it is going to be very contentious. you have all sorts of factions in both the democratic and republican caucuses from, you know, the war hawks like lindsey graham and john mccain who think the president is not proposing enough military action to people, liberal democrats, rand
paul, the libertarians who think we have no business getting involved in syria. and in the middle are a whole lot of people who might be inclined to follow the leader in chief. so this is a very, very difficult situation that the president has created by going to congress where it appeared last week that he was going to act on his own and people were bracing for that, but he decided he needed a little bit more support behind him, especially after the british parliament decided that britain was not going to support the united states. and that's why we are at this point. >> must have been just up late thinking about all the different facets and nuances. i know i have been about strange bedfellows here and seeing a president who won the peace prize suddenly. i'm getting deja vu thinking
about previous presidents that tried to galvanize support for strike in the middle east and here it is, president barack obama trying to galvanize his own party for really more his own party than republicans for going along on this. how much truth is there he's moved to where there would be more of an objective now to get man cane on board. is the size of the strike, the talk widening that maybe we will arm some rebels and maybe we will try to tip the balance over there instead of, i don't know what it was before, just a punishment. >> i don't understand the objective. >> there was -- i guarantee you there is no objective here. >> the problem is, what do you want to have? there is 1200 different rebel groups that are fighting. >> the free syrian army is -- is
secular, it is the one that mccain talked about a lot, met with these people, these are good people, but more radicals have come in. i was sending e-mails to richard while obama was 45 minutes late to tell us what he was going to do and unbelievable. >> john, it is a morase, i went around and around trying to figure out what the right answer is. i don't know how congressional leaders -- >> this is why it is so problematic to go to congress. you now have got 535 potential commanders in chief instead of one. and, you know, what we have become used to in the united states, presidents, when they decide a military action is in the u.s. national interest, going ahead, maybe seeking support from congress, maybe seeking their approval after it happened, but not making a decision saying you need to act and then going to congress.
so he's going to have to then make an argument and get 218 votes in the house and 50 in the united states senate and it is not going to be easy. john mccain, joe, to answer your question, he's not the sweet spot. the sweet spot is people who want to narrow this resolution who say no, no, we don't want to get too involved. the dominant view is not to get involved. >> here we have a guy if we believe our intelligence, assad ordered this event. so at that point, we have already said, regime change is something we want to do. that was a year ago. or two years. regime change was something we wanted to do. suddenly we see the evidence, he's actually killed 400 plus children and over 1,000 people with gas, and suddenly we were tiptoeing around the idea of regime change. we want to go in there, want to punish him, but don't want to sway it either way because we're worried about the al qaeda elements. you can make the case, first
thing we do is get this guy can no longer be there. he violated international law, a war criminal, needs to be brought to trial. you can get much more -- because of the iraq hangover we have, or whatever you want to call it, can't do it. >> the u.n. is not on board. >> arab league saying different things. >> go ahead, john. >> sounds like you want to lead ap a platoon over there in damascus. >> pardon me. >> sounds like you want to lead a platoon over there in damascus. >> not at all. i refer to engel on some of this stuff, just to say i'm going to hit you, but not hurt you, made no sense and i'm glad he put it off and decided to go to congress. because that, you know, the ramifications of what could happen -- when you're not doing anything and terrible things can happen, with hezbollah or iran or something like that, and you don't know the outcome, why do
it if you're not sure it is going to accomplish anything. >> you just identified the challenge of the policy is to hit him and hurt him. not hit him, but not hurt him. >> not hurt him enough for -- to sway it for the rebels, not enough to where you actually affect the outcome. >> yes. look. i'm not a strategist, but i'm saying the challenge for the administration by their policy is to hit him and hurt him so that in fact it does have an effect. the reason why they don't want to take charge of the war, in essence, become the leader of the opposition, is we don't want to own syria when assad goes. there is zero appetite in the american people for that, zero appetite really in the administration, and almost everybody in congress, maybe a few outliers and the future course of syria is going to be determined in syria and if the
united states tried to take charge of that process, that has the potential of a major disaster for many. >> we have decided that you can't use gas. the world has decided. joining us now, jack jacobs, msnbc analyst. we had you on last week. good to see you again. there is -- i was talking about some of the nuances of this. there is people that really think that we have -- that the president's abdicated some executive power here and more or less i guess axelrod said, all right, we are now allowing congress to be the ones what cut the bus, like the dog chasing the bus. what do you do with it? now you put it in congress' domain. what did you make of what happened on saturday? >> i think it was a really awful sequence of events, not properly orchestrated. the time you get started talking about retaliation for using gas was about two years ago.
not now. >> right. there were small strikes with gas. we knew about them and we sort of knew we had the red line comment and were hoping no one remembered it. >> that was -- for a guy who has got pretty good political chops, like the president of the united states, that was among the dumbest thing you could possibly say. this is after they already used gas. then they use it some more. after you have drawn a line in the sand and then for the ens ensuing year, do not do anything to get anybody on your side to react just in case the guy -- the guy calls your bluff. we didn't talk to great britain to any great extent. no sensitivity at all for where nato is coming from. understanding that david cameron is not only in a parliamentary democracy, but also is heading a coalition government and doesn't really control anything. they didn't work the boards, they didn't do anything but sit
around and wait, wait for stuff to happen. and then the very first thing that they do is to send the secretary of state out there to give the best -- the most impassioned, the most convincing speech of his career and then knock his pegs out from under him. just all looks bush league, pardon the pun. just really amateur night. >> amazing. and you can't help but -- just the irony of the whole situation because the president is now, you know, going to have to hope that the republicans and enough of them come on board to maybe put some pressure on the far left of his party, which doesn't want to do this and then you don't have public opinion for it at this point. >> nothing but irony here. you have the peace president, the secretary of state anti-war demonstrator, who is really annoyed by the war in vietnam and partially if not mostly because it had not yet been approved by congress, congress -- nobody declared any war, so he was opposed to that.
and arguing stren with uously a persuasively that -- >> i could if i want, but i'm not going to. >> i'm not going to. this is going to make an extremely difficult for kerry to do his business, to operate with little state craft we have remaining out in the world. nobody is going to believe anything he says. >> kerry could have been president if he would have given speeches like that when, you know, back when he was running. that was, you know -- >> we were here at the station -- at the studio at msnbc, at the time he was giving the speech and rib in the meeting, everybody looking at one another saying that's a presidential speech and it was. it was a spectacular speech. >> amazing. i have sympathy for the president. but to some extent, to see him sort of go against his principles, because the situation changed, i'm gratified to see him do that. i kind of just wish he would,
you know, he's willing to use military use, i would he would use the private sector to try to help with jobs. to go back on the government there, maybe do the market forces to do health care, for example. >> when you're in charge, as you know in business you got to say, okay, we'll do the operations and all that stuff, but tell me what is going to bite me in the back side and we got to prepare for it and this president didn't do it. >> all right, thank you. we appreciate it. we're going to speak with the chairman of the -- today of the senate foreign relations committee, senator robert menendez. and then senator ron johnson will join us at 8:40 eastern, coming off the terrible firing at jcpenney. coming up, a government program involving tapping records of decades of american phone calls and this has nothing to do with the nsa. but first, long distance swimmer diana nyad made history becoming the first person to swim the 110 treacherous miles from cuba to florida without a shark cage. this was her fifth try.
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huge at&t database. the law enforcement officials used subpoenas. the new york times reporting the partnership between drug officials and at&t called the hemisphere project and very similar to nsa's controversial collection of phone call logs but covers a longer time period. the other change here, the differences, this is all about subpoenas that were used on this, but it is a way of trying to track down some criminals that would be very hard to catch otherwise because they use those disposable phones. >> the future is here. we are in -- it is 1984. >> this is happening in some way -- >> i didn't know it was happening for drugs. i thought terrorists were one thing. >> the idea of what becky said about the cell phones, the burners in the drug industry, and it is working at some level. then the question is -- >> don't say anything. don't e-mail anything. don't say anything. >> they're doing this and they're doing it for the terrorists. the question is what else are they looking at. that's the larger sort of -- the undertone, undercurrent of the story. >> if you were a huffington post
far left person that -- this would -- you're, like, pulling your hair out at this point. your privacy has been so violated at this point. >> i told you i'm not worried. >> i'm not doing anything. >> i do understand the larger issue. >> i do too. let me tell you quickly about another story. caterpillar put its workers on notice. the company is cautioning short-term incentive plans will be making its smallest payout since the recession when the payments go out next march. caterpillar is one of many companies that adopted the pay it risk compensation system. it ties a percentage of nearly every non-union employee's income to the company's financial performance. advocates of the plans say they do allow employees to participate in the prosperity of their employers. critics counter the plans are part of a broader transfer of risk from the employer to the employee. this is no different, the ceo tied into the same package and a program that paid out $1.2 billion a few years ago. >> this is a pay for performance
issue. the only thing that is different here is that the ceo is making obviously millions of dollars, the employees in some cases according to this piece actually are making a lot less than that, potentially 20, 30, 40, $50,000 in certain cases and so therefore is there a disconnect and should there be minimums so if something horrible happens in a year where things are really not so hot, you get a minimum -- makes it difficult. >> your average has less to do with the outcome of what is going on with the company. you can't really tie it to him, where as the pay for performance with senior officers, they're steering a ship a lot more than the rank and file you would think. rank and file have to pay for -- >> pay for the mistakes. >> they didn't decide to buy -- which one was -- >> no it was the one from minnesota, paul ryan was -- >> one from wisconsin or next -- >> bo cyrus.
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welcome back to "squawk box" this morning. we have three big deals to talk about. verizon now agreed to pay $130 billion to buy vodafone out of its u.s. wireless business. kayla taushe will join us to talk about that megadeal. and lowell mcadam in a cnbc exclusive, joining "squawk on the street" at 9:15 eastern t e
time. cbs and time warner cable reached a deal. terms of the deal not disclosed. microsoft buyi ining nokia's ha set business. jon fortt joins us with a special guest. jon, good morning. >> andrew, thanks. good morning. timo ihamuotila, the cfo and interim president of nokia joins us for a first on cnbc interview after microsoft and nokia announced this $7.2 billion blockbuster transaction for the tech and mobile world. mr. ihamuotila, thank you for joining us. first question for you is why sell? some might argue it looked like nokia's hand set business including the lumia is on the upswing, gaining share. looked like profitability, stable profitability was on the horizon. why do this transaction now? >> well, we actually think this transaction is a very satisfactory transaction for the
nokia shareholders. we are building a strong european technology company, we will have strong finance opposition, improved earnings on the assets which will remain with nokia and we will have three businesses continuing each leader in their respective areas. so we feel this is a good time, a good transaction for the nokia shareholders. >> one thing that jumped out to me, mr. ihamuotila, about your expectations for this transaction is that you expect it to close in first quarter 2014 for companies of this size. a lot of people would say that's awfully soon. do you have some indication from regulators that they're likely to approve this? how are you confident that this will be able to close in the first quarter? >> well, this transaction is subject to the normal closing conditions. this is something with nokia board of directors is proposing for the nokia -- the shareholders meeting to approve
on the 19th -- on the 19th of november. and we are, of course, simultaneously working then together with microsoft to get necessary regulatory approvals and to fulfill the other closing conditions. but we feel confident that that's the right target for closing first quarter 2014. >> what kind of conditions do you expect if any that regulators might impose on microsoft, as far as how it deals with the devices business moving forward, for this to go through. are they going to have to keep the low end business going for affordability of hand sets, are they going to have to continue to employ a certain percentage of the employees, 32,000 employees they're bringing over? >> so clearly i can't comment on microsoft perspective, but, of course, the boards of both companies feel that this transaction is a win-win for the companies, for the customers, and shareholders, and are thus
going forward, and, of course, we feel that this transaction is very likely to close and expect to close during the first quarter of 2014. >> a lot of people think of nokia's business as really being phones, but the way i read it, correct me if i'm wrong here, you're just shedding 36% of your employees in this transaction so you're keeping the lions share. and i believe you said your profit margins are going from somewhere around 4% to 12% once you're rid of the hand set business. what is left with nokia and what are its growth prospects once this transaction is completed, assuming it is approved. >> you're absolutely correct. we feel we have an improved earnings profile for the company. if we look at first half, as you said, the profitability would have gone from 4% on performance basis if the transaction would have closed to about 12%. we are going to hold on to three
strong businesses on the mobile network side being a leader in mobile networks and relate the services business being present in over 120 countries in the world. here, a leading mapping and navigation business serving almost all customers in the world and four out of five cars within the navigation is actually using that service and we're very pleased that microsoft will now become one of the top three customers for the business. >> mr. ihamuotila, chief financial officer, interim president of nokia, very interesting transaction for the tech world blockbuster there. microsoft buying the devices and services business. thanks so much for joining us. hope i pronounced your name at least close to correctly. becky? >> jon, thank you very much. we appreciate it. we'll check in with you later this morning. when we come back, from one deal to another. we'll talk about verizon and
vodafone to the tune of $130 billion. and cbs and time warner cable settling their dispute after a month long blackout. take a look at the u.s. equity futures this morning as we come back to work after labor day. you'll see triple digit gains for the futures. dow futures up. s&p futures up by 15. "squawk box" will be right back. ♪ ♪ ♪ i've got something for you too. (announcer) fancy feast delights with cheddar. a meal that is sure to delight your cheese lover. now available in the classic form she loves. fancy feast. the best ingredient is love.
>> when vodafone bought manisman in 2000. >> you're kidding? why were people saying this is the biggest? >> this is the biggest, the second biggest in history, the second biggest transaction -- >> kayla, thank you for that report. see you -- oh, no, no. go ahead. sorry. >> no, joe, i should let you guys talk about it. you seem to have a lot of thoughts about it. this was not necessarily a merger, more of a financing event because of the sheer size of it and because it had been in the works for so long, that $130 billion deal, it is going to be half cash, half stock, and it is expected to close in the first quarter of next year. this deal was so in the works for a long time, i'm told bankers actually revisited it once a month since 2010. for the last three years they basically crunched the numbers and saw what is possible really dependent on the availability of cheap debt in the capital markets. we know in the last few years since the financial crisis that made it possible. also, recently in the last few months, because yields have been rising, there has been a
slowdown in issuing so a lot of buy side investors want to snap up in $61 billion of verizon bonds in the next year or so. now, one piece that was integral to this deal was lowell mcadam sought counsel from jamie dimon on this deal. jpmorgan one of the lead advisers to verizon on the deal. i'm told jamie went to verizon's board meeting on friday, to convince them that such a deal was possible and that it was now or never. dimon had an interest in this. big business for the bank. jpmorgan and morgan stanley are underwriting that $61 billion bridge loan. in the next few days, i'm told verizon will issue more than $30 billion in bonds and will go back to the bond market in the second quarter of next year. it will issue them around 5%, that's cheaper than any of verizon's existing debt, so you can see why it is so important that the company do this now. for the banks, $1.3 billion in fees will be split.
that will be split by jpmorgan and morgan stanley, the lead advisers and financiers and bank of america and barclays which worked on the financing and guggenheim partners and paul taubman, a former morgan stanley executive, co-head of the institutional securities group, he had a very celebrated career as a dealmaker, as you know, but a rather unceremonious retirement last november when another executive was picked to run that unit. he's a freelance dealmaker at this point. and not a bad way to start your career as one of those with $1.3 billion in deal fees getting split there. so certainly an interesting day. big business for the bank for a decade long deal in the works. i know a lot of people are glad to have this out of the pipeline. back to you. >> kayla, thank you for that. an eight-figure day for a single adviser. you work from the kitchen, make a lot of money, not a bad way to do it. paul, very good adviser, one of the best. comcast adviser, one of brian
roberts -- for a very long time. >> how much is eight figure. >> eight figures is not -- >> 10 to 100. or 10 to 99. he'll do well. for being an adviser from his kitchen with no analyst or assistants or anybody, it is a good way to do it. a good model. >> you don't count the zero. >> you count all the numbers. willpower powers, the senior reh analyst at robert w. baird. i wanted to talk about time warner and cbs, but let's talk about vodafone and verizon for a second. does this make sense to you? the reason i ask is ultimately verizon is buying something it already controls. so effectively all it is doing is buying cash flow and it is going to be paying a lot of money for that cash flow. >> that's right. i think this is one of those rare instances where out of the gate it looks like a win-win for both parties. $130 billion is a fair valuation. verizon, the most important long-term attribute is the
ability to control that substantial free cash flow at verizon wireless, to fund its own dividend, to fund future growth initiatives. i think that's the key driver here to control 100% of the cash flow long-term. >> and let's talk about cbs this morning. cbs time warner cable after a month, a month and a half, we talked about it every single week what is going to happen, wh who won? >> who won is the consumers. the cowboys fans all won and giants fans and fans elsewhere for the nfl coming up here. at the end of the day, this is emblematic of the ongoing issue, the battle between the content providers and distributors. >> should we assume content won? this reminds me of like a divorce settlement where neither party can talk about, you know, what happened? one gets paid off to the point where if they want to keep it, they can't say anything. both of them had to say, yeah, gosh, it's great. we did -- we got more than we wanted. who really ended -- there was an
argument. who had to give in? who gave in? >> that's a good question. >> you don't know who gave in? you cover this. >> i think at the end of the day the content guys still have the upper hand. i think that's the bottom line. my suspicion is time warner cable didn't get everything it wants. this is an age where digital distribution five years ago people didn't have ipads. time carnkara warner is trying into those devices and cbs wants a bigger slice of that. >> we should note the ceo of time warner cable said we didn't get everything we want, so by default, i think you can see who the loser is. >> yeah, but -- >> a clear win for cbs? >> i don't know it is a clear win for cbs either. i think this is, you know, it is a draw with a slight edge to cbs is my best guess. >> do we know how much they're asking for? >> we don't know what they got. that makes it difficult too to ascertain. >> time warner got it but c
ben bs bought them dinner. >> time warner is hoping the fcc would step in or congress would step in. that didn't happen, right? >> yeah. to our knowledge, they did not. >> people said because it was the summer and nothing that important on cbs that time warner could hold off for a while. the minute something important was coming, time warner would have to fold. and football is coming, homeland is coming, that's what happened, right? the content guys always prevail. >> that's a big piece of it. sitting down here in cowboys country, that had to be an important element of discussion. >> cowboys haven't won anything in years, will. get with the program here. >> still america's team, right? >> no. >> dallas' team. >> no more than atlanta. >> thank you for joining us. we should note tomorrow morning, we're going to have a guest who actually knows the key figures behind this deal. we'll have some answers in the
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we are talking about syria, the debate over using military force. joining us is ben white and zach. good morning, guys. what's the inside line, what is about to happen this week? >> well, the first thing that will happen is a critical senate foreign relations committee with john kerry and chuck hagel answering questions. they are skeptical of the syrian intervention. the question is, can obama when these votes? i was surprised he decided to go seek congressional approval after it looked leak he was going to unilaterally go forward with a strike. there is a chance he loses. we den know in the house whether you have enough republicans to vote in favor of the resolution. you have a lot of isolationists, not in favor of military intervention. they has to get 60 votes. if barak barak loses these votes, it's a risky strategy to go for congressional approval. >> zach, what's the market been?
>> look, the market, if you judge by the future, it's clear betting this is not an event worth betting on. i think, in fact, in august. he should have made that bet as well. i was talking to ben earlier saying all those head loins we had, market down on syria affairsment i'm not clear the market was down. they made a convenient headline. there was not a lot else going on. but this is a serious political event. this is a serious international event. it is not a serious market event. >> last week, we got a number that was good and the market was, it was trading. i think a durable gods number. it looked like the taper was off all morning until kerry's speech. it sold off. >> when we hit saturday and after i saw the president, he came out late. i watched him do that. after he said that, after i got done thinking ability the military implication, i immediately thought, wow, we may have no taper in september and we're not doing anything in syria at least until the 9th. this market will crank on
tuesday. that's immediately what i thought. because we went no that squaring position on friday. we thought we had a possible 5:00 a.m. start today. we thought there moifb the max. >> i have to say, you have to distinguish 2009 the media story and the fact that the last week of august have unbelievable low trading volume and you could have had four algorithms. >> we had good economic numbers. >> that made it. that gdp number was unequivocally good. >> while i agree with ben, this is an issue for the presidency and the rebalancing of power. . i'm not as negative. we had a tendency it has swung to the executive office. you do have these moments in american history, power inevitably moves away back towards a more balanced power system in congress. that's a normal reaction. our lens is my good. >> the drum beat of streak, i have the authority to lock
forward. then he didn't. >> if you lock at it cynically in a political way versus what was good for america, you come up with different things, i think. if you put, considering it probably a lose-lose this strike and you suddenly you sort of put some of that on to congress. >> right. >> politically, it's a good calculus for him to have done that. the journal of the day is scathing in the load editorial of what it does for american credible. at left politically -- >> politically, is it that helpful? it's helpful if you get into this and it's a quack more, a problem, congress owns it, it's partially to blame. the risk is you lose the vote the risk is you look weak. there is a political downsize for obama. >> maybe he should go back months and rethink how he handled this from the beginning. >> you were noting the pentagon and military costs and whether we will pull back and maybe we won't now. >> what's the sequester? you can make the argument, this will cost us a significant
amount of money. which they might. >> ben, zach, gentleman thank you both very much. when we come back, three big corporate deals. ess you can telm how much you want to pay and it gives you a range of options to choose from. huh? i'm looking at it right now. oh, yeah? yeah. what's the... guest room situation? the "name your price" tool, making the world a little more progressive. hooking up the country whelping business run ♪ ♪ build! we're investing big to keep our country in the lead. ♪ load! we keep moving to deliver what you need. and that means growth, lots of cargo going all around the globe. cars and parts, fuel and steel, peas and rice, hey that's nice! ♪ norfolk southern what's your function? ♪ ♪ helping this big country move ahead as one ♪ ♪ norfolk southern how's that function? ♪
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>> good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky wick along with joe kernen and andrew ross sorkin. the futures this morning are pointing higher this comes after may, 2012. today we see triple dim it gains. the dow futures up 103 point t. subpoena is up close to 15 points. in our headlines this morning.
nokia is selling its handset business. the ceo executive send him to his old company to exceed steve ballmer at ceo. much more in just a moment. verizon wireless is paying $130 to buy vodafone's steak. >> that deal ends a 14-year partnership. it is the third largest deal this history. we will have more later as well. also, cbs and time warper cable ended a month long dispute. restored programming to time warner cable systems in new york, los angeles and dallas. beth side say they are pleased with the agreement, when you read between the tea leaves, it seems like cbs came out on top. >> cnbc's john ford spoke to steve ballmer here on cnbc earlier and joins us now with a
wrap-up. john, good morning. >> reporter: hey, we had ballmer and nokia's interim president and cfo first on cnbc for you. i asked ballmer about the return of stephen eloff. he was in charge until he took the job. he will be seen as the front run tore exceed microsoft's ceo. ballmer, himself, told me he's gained more respect for eloff over the last three years. listen. elop. >> we need to make sure the nokia-microsoft acquisition goes flawlessly, that we not only stain momentum but accelerate. we know how to work together. we are glad to have stephen come back to microsoft. much of the nokia executive team on devices and services will joan us. and that will form the core of a variety of things 23 will do in devices. >> now, elop stepping down as
nokia ceo where this transaction is up for approval. they say for the avoid an appearance of a conflict of interest. i think it may look less like nokia acquiring microsoft if elop gets the nod. interesting to note, microsoft is getting tles less than 40% of the employees in this deal. the portion that remains is going to get a lot more profitable. i talked to nokia's cfo about that. he mentioned the profit margins were going for the 4% to 12%. we will see investors weigh in on this on both sides once the stocks start trading. it looks like nokia is set to be up as expected by more than a third. microsoft down a dumb percentage points. there will be a lot of different opinions about elop's performance as nokia's ceo, how that will translate to microsoft. whether this kind of of blows up microsoft's eco-system in
mobile. whether there was that much of a partner ecosystem to gen with outside of nokia, itself, guys. >> thank you for that report. we will get reaction on the phone, daniel ernst of hudson research joins us on the news line. i got to tell you, this transaction makes next to no sense to me. this is a company they had a relationship with. 80% of microsoft's telephone business or mobile business is on nokia already. why do you node to do this? >> well, three points first. i think the first thing that popped out for the me is in is a negative for plaque berr negati. two, i think this is also bad for the hardware businesses 069 dell and hps of the worldment even though smartphone growth is growing, tablet growth might even be slowing here. really the future of computeing is still mobile and now all the
major operating systems for mobile have their own hardware. apple, of course, has apple hardware. google has motorola and access. now, nooirk microsoft has if nokia hardware business. third, back to your point, tremendous execution risk in this dole. they had 3.7% market stair sha irin smartphones in q 2 and their operating modem here they weighed out in their powerpoint this morning takes it to 15% by 2018. and their goal of being what they called accredited eps in fiscal year ending june, 2015, which is a long ways out is only a few million dollars. so really it's not until june, 2016 that they may be able to do anything. so there is a lot of futures there. 32,000 more employees. it seems like it will be very hard to pull this off. >> stephen what is so great, daniel, sorry what is so great about stephen elop.
the stock at nokia we decided had gone the from 12 to 14 to 3 bucks. he decides to go with microsoft over android. there is a lot of decisions this man made at nokia which have not been particularly brilliant. why do we think he would be a particularly brilliant guy at microsoft? >> yeah. you are not the only one asking that question. so had he actually turned the business around, then that would be a different story. i mean, you know the story that noki will tell you is that year over 84, there are smartphone are up 78% year over year. it's only two over 7 million handsets. so, you know, scale. >> and so what does this say ultimately about? do you think that stephen elop ultimately runs microsoft? the other question we raised, what happens if he doesn't get the job and then he leaves and then what? >> well, the other big question, relative to who becomes ceo,
what do they think of the structure? if it's not stoemp elop, what do they think about if different divisions. are they going to spin out entertainment and devices and become it's own stand alone company again? the hardware business goes off with x-box. so many questions here at the time of change. so like i say, i think there is a lot of excuse rate here. there are a lot of questions and answers in the transaction. >> two other pieces that bother me. unlike the transaction with motorola, they're licensing the patents, number two, they're not getting the mapping business. isn't the mapping business nokia has is one of the valuable jules in the whole thing? >> well, actually, the big mapping system that microsoft already has i think is quite good. so, you know, they're almost having two different redundant systems. it almost seems the re-licensing was a give me. a little spin to sell us to our shareholders. we need money over here at nokia
systems. you almost attach that onto the value of the deal. >> daniel, thank you for dealing us. joe, you think there is a $7 billion write down? >> years from now when we talk about it, a tribute, maybe we pull the tape. just in case. i don't know. >> is ballmer right to think it 340edz to be a devices company? >> that's what i mean, microsoft has flailed at a few other things, for nokia, i have to defend them a little bit. if phones they made were commodity phones. they were against ifine 2 and samsung. >> all they had to choose android and tad be samsung today. >> look what's happened to blackberry over that time period. it is tricky. >> you see, everyone who took on android and decided they were going to take that system won. go with someone that sell out of a person, it was a motorola flip phone. i thinkpy kids said, did you get
that before electricity? which the shows you how -- >> quickly this whole voirmt thanks. >> the razor flip phone was cool. >> it was. i had one. >> now it's like, when they said that, i said, you should look at the phone jerry seinfeld used to have or before gecko. or a car phone. >> it was fast moving industry. >> motorola was nokia before nokia was nokia. now, nokia is nokia. the senate foreign relations will hold a hearing on both secretary of defense chuck haggle and secretary of defense john kerry will be testifying about using military force against syria. ayman javers jones us. the last couple weeks have been something to witness, ayman. as of saturday, everything
changed. that was amazing. i don't think i ever sat there waiting for the president to say something when there is football and all kind of other stuff happening. i waited 45 minute before he finally showed -- he was on the phone in the oval office. did you see that? we didn't know what was going on or what he was going to say. it was unbelievable. >> yeah, it's a very interesting moment in washington, joechlt we haven't seen a moment like this in over a decade. now congress is going to be asked to vote on whether or not the united states should strike syria and pay back syria and degrade its capabilities for firing off chemical weapons against civilians in that country's civil war. yesterday the president met with john mccain and lindsey graham, asking them for their support as they try to marshall if votes. the president would very much like to have these strikes on syria. members of congress a little more reluctant. john mccain came out after that meeting. here's what he had to say. >> a vote against that resolution by congress i think
would be catastrophic because it would undermine the credibility of the united states of america and the president of the occupation. none of us want. so a lot more at stake here, guys, than just this simple action, relatively simple and contained action as the white house is describing it in sirria. also at steak here is the credibility of the united states says mccain, then, of course, you can't forget there are a number of characters up on capitol hill who are thinking about running for president of the united states and a vote on a war resolution can haunt a presidential candidate just see what happened to hillary clinton back during the iraq war authorization vote. >> that might be the one vote that really doend her the presidential nomination for her party back in 2008 and allowed barak barak to get access to the presidency of the united states. so a lot of moving pieces up here on capitol hill. a lot of stuff for these guys to sort out. >> thank you for that report. we should note later in the program, we will have senator robert menen dez, he's the
chairman of the foreign relations committee. he will join us to talk more about the hearing today and this situation in syria. up next, we will get you ready for a short and trading week ahead. an important one as we count down to the jobs friday number. still to him co, a deal between doctor bs and time warn tore end a plaqueout in major cities across the country. more than 3 million homes will get to see that this weekend. "squawk box" will be right back. .
ska. >> welcome back to "squawk box." with your green arrows across the boardment i think there is a function a little of syria. a little of the economic numbers we got over the weekend. the dow looks like it will open 100 point higher. the s&p 500 up close to 15 points. watching shares of jc penney, ayman capital, he is now disclosing he has nearly 5.2% stake in j.c. penney. ayman holds over a little more than 411 shares. they reported august 20th. he had taken a sizable stake in jc penney. guard jardin. >> that deal became official. dearborn partners had bought yankee candle for $1.6 billion in 2006. before that, it was a for
profit. >> the yarden ceo is a guest host. >> they own everything from k 2 skis to remember the crock pots? >> a british guy. >> i have a crockpot picture. >> do you have one with my picture on it? >> no, one with my picture on it. >> i have one with my picture on it. >> let's talk about sirria. a skwlobs report we are waiting for on friday. joining us is our guest host today, strategos managing partner and from minneapolis, jim paulsen, wells capital management chief investment strategist. jason. when you see the futures this morning the reaction, what do you think is happening? is this syria? is this what's happening with the economy or is it just the people are coming back for the work after having august off? >> it's probably a combination, kif giving you wishy washy
answers. a combination of the three. it think it has to do with fact that they are off the table until congress gets back from vacation. it's such a pressing issue they thai may have to be on evacuation for another week. >> it may never happen. >> i think it brings up other questions, sirria though, which are important with regard to the taper. i think it bring noose focus potentially the president's pick for who succeeds chairman bernanke. >> how does syria relate to the taper? . >> the same people. i talked to dan clifton in our walk office this morning. the same people the president needs to vote for the drts that he needs to vote for authorization on syria are the same people he's going to need to pass somers. those are the most opposed to someers' nomination. there is a political capital at risk and the question of the efficacy of what's happened that might make it difficult for the
president to get all the things he wants, including who he wants to code chairman bernanke. >> you really think if he puts it up to congress and they say no, he can say, lock, i did what i was supposed to do. the public opinion would be with congress on that. so i just don't know if that would be seen by him, i think it's more important -- we seen how important it is that larry somers gets this job from the president i think. >> it was not a done deal before, joe, before, that he would be confirmed before this absolutely no way. >> john harwood reported that. >> it is absolutely certain he would be nominatedment i am telling you. >> either one can get through. >> hey, jen, it's been several weeks since i talked to you. looking at the market, we are below 15,000. it seems the bulls have been a little on the run. what's happened and where do you think we head from here? >> you know, becky, i just think
since may, i just think we have facing a lot of hurdles that are going to keep us from going a lot higher than we already have been this year. much higher valuations in equities. a complete re-valuation of the bond market that isn't over yet, i don't think. we got syria, tapering, a fiscal drama. i think we'll get through every one of those. i don't think they will kill this thing off. but i think it will keep it from going a lot higher. the biggest thing in the room, i think syria tapering all side shows. i think the most important thing this week is going to be the employment numbers aed what's happening on momentum on main street. so far, that's stayed pretty good. you know, real private growth in the first half of this year is 3%. 3.3% in the second quarter. i think we are likely to get better in the second half. we will get some report on this friday. if those reports stay strong. i also think we will get lower.
i'd be a buyer in here, closer to 1,600. i'd be more cautious at 1,700. maybe we get through some of these hurdles, becky, i think we make another lelg higher next year. >> is it your general feeling, the economy is improving. we are adding jobs? >> yes, i think 23 are. we were having some of the best job creation, with a weak report here or there. 200,000 plus the unemployment rate keeps coming down, claim numbers keep going down, the confidence reports says jobs getting better versus not. there is a lot of i think decent reports on the job market. i'm not saying this ro bust. i think it's good enough to carry the expectation. >> i came firmly, i was thinking about you in your camp with that gdp number. all right. good news is good news. i don't care, addicts get over it. we node to get rid of this somehow. we mete them out, the sonar the better. the only way to do that is if
rates are rising for good reason. that's with better. we've got to get that off the table in the future so that we're not constantly worried about the tapering coming. you said the tapering would be a good thing for the market. once it starts, it will be a good thing because it's for the right reason. >> i agree, joe. >> i'm with you now. >> i think we're going to get tapering. i think that will happen this year. i think we will get to the end of the year, it will be okay. the economy will be okay. we will decide if standing on its own feet by itself, that can be a confidence bother for next 84 t. fortunate thing for syria, for me, i know this is going away from the seriousness of the war, is that we took syria from, you know, what we have been dealing with with syria tapering is selling the rumor. i'm kind of excited getting into september. because we will get by on the news. are what we just did with syria was push the sell on the rumor now for another two weeks in the future. i think that's the type of
thing, psychologically, the market has to deal with this stuff. i think when we get to what happens, it's going to be far less negative than what we fear leading up to it. >> i think the dog that hasn't barked in this entire recovery has been capital spending. we've seen improvements in employment. you have seen no follow through on capital spending. >> the chicken and the ec thing. >> usually, those things tend to move very highly correlated. basically, it's the high decision t. good news in our view it's very rare those things diverge for very long. we think capital spending will come back. >> you think it will adjust? >> i do. i think, the other thing i would say is one of the things in your neck of the woods of the markets, is that i think in my day they were called raiders. now they're called activists. i think that's a very healthy sign. because what's happening now the natives are getting restless in terms of the cash on the balance
sheet. >> jason, you will be with us. jim, thanks a lot for joining us. >> coming up, it's all about deals, microsoft buying nokia's handset business. one of the largest transactions, happening with vodafone and verizon wireless. the end of the cable war. those stories making market head loins this morning him we got them all covered. plus, a big hearing on the hill this morning as the president seeks to convince skeptics that response is needed in syria. senator robert menendez will join us. "squawk box" returns right after this .
. >> well, in addition to all these things happening, now i got two schools, i got home room teachers, principals starting school today. my son's got mrs. baker. good luck, mrs. baker. mrs. kelly will be there helping. dr. jason, a shoutout to him. the principal that's been there from day one. then i got blake. a couple home room teachers that i need, you don't have to do this yet. >> not yet. >> ours don't start until next week. >> mr. shepherd, mr. sturgeon, be fis. >> home room teachers gone givous grades, though. you should be talking about the
other teachers. >> i'm going to the man on top, dr. called well. >> you got something right here. >> this is a "squawk" prediction is what it is. >> then you got to two best managers in business, brian rogers and steve burke. they couldn't do any work without -- have i forgotten any? >> mark. >> that goes without saying. >> you have any? you don't know the name? >> no, they don't start school until next week. >> senator robert menendez, equal time. senator robert men endez on what's likely to happen. microsoft buying nokia's handset. this is 7 billion, which is 1/20 of the verizon deal. here's steve ballmer on cnbc
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in the headlines this morning the additional megadeals, plenty of economic data for investors to consider. supply management manufacturing index. >> that comes out at 10:00 eastern time, it comes as economists expect the manufacturing growth in august a. slightly slower pace in july. construction spending for july will be out at 10:00 eastern time. it calls for an increase of .4 following a devine in june. bank of america wants to share an offering up to $1.5 billion following the expiration of a lockup last month. let's take a quick look at shares of j.c. penney, they have a new steak of 5.2% t. shares rising further since we first reported that news earlier this hour. the obama administration
wrapping up pressure ahead of a key hearing whether action is warranted against syria. thank you for joining us this morning. >> reporter: good morning him it's a tense situation. to give an idea of how volatile it is. this morning the military conducted a missile defense system test. that sent the region here into are a frenzy, which first picked up by russian military stations. they detected the objects, two ballistic objects landing in the mediterranean. >> that drew a response from the u.s. which initially said it was not aware of ballistic testing in the region but that ultimately did acknowledge there was a missile defense system that was engaged by the israeli military. now, against that backdrop, the humanitarian six has reached a very grim milestone, according
to united nations agency that overseas refugees, they now say 2 million refugees have left syria into neighboring countries and that more than doubled in the last six months. to give an idea how it is accelerating on the ground. meanwhile, the syrian president bashar assad gave his first interview in which he said his country would remain defiant. >> i think we are having trouble pick ig it up. >> the satellite. >> we continue to talk about these serious issues that have been affecting the market to this point. >> jason is here, let's talk to our guest host. overall, we were waiting, waiting, waiting for some type of pullback. i'm just wondering whether anyone -- >> is that it? >> whether anyone said i'm in.
the people waiting for a pullback, it's never enough for them to get in. they never get in. >> actually in august, if you lock at the fun flow data, you saw equities after a couple months of inflows. you seen obviously massive outflows from bond funds, that seems to be a major seat change. on equities, though, my own vow, it's not quite the tina market we talked about earlier this 84, where there is no alternative. it's much easier when you have negative real rates to say, listen, this is the only game in town i can get real rates return above inflation. now there are some i think decent values in the credit markets. by the same token, i tend to agree, i think there is choppiness, this is a december to remember in terms of the macro events. generally speaking, there aren't great options. >> if we close out the year on the high, they're not locking
above for another 5 for 10% on what we've already go. they're trying to maintain that, given what's -- you know ahead of us. >> the irony, joe, i spend all mytime going around the country visiting institutional investors. so the markets have total return 16% last yoemplt it's up 16-plus total return. >> where are the obum hoys in. >> up 20 no one is happy. right. the long only guys are having a hardtime boating the endis soes the index is boating twoebl probably two-thirds and hedge fund are on a year on a comparative basis. how you will mote the actuarial returns promised to retirees and people in the plans. a lot of time private equity are coming up way short. i think we're at the beginning, the regular rotation may not be in from stocks to bonds, from bonds to stocks. it might be from alternative
assets into higher yielding or equities. >> when does that happen? >> i think it will start, it's already starting to happen. >> everyone is saying this will happen. >> now you are saying the real great rotation is something different. >> i never thought it would be necessarily from bonds into stocks. i thought the initial reaction would be no cash. which is largely what's happened. i think for the institutional investors, the endowments, the pension funds, 7.5 actuarial assumption, you lock at the performance, they were nowhere near it. you have 15% in alternative investments. there has to be real changes. you almost have to take more risks, which is exactly what chairman bernanke has been trying to get people to do with this monetary policy. >> there is no one right now thinking the risk is being out, there is no one is saying the train is leaving the station, i'm not on. >> there was. >> then we somehow, we worked off that excess, which it's bad
when people often get there, because then they're getting in at the top a lot. now we worked it off. >> in my view, that's one of the primary benefits or things, good things about the market right now. no one is line dancing. the fact that markets are at 1630 or whatever, got 1,700. no one feels good about it. the market as i say, the cliche likes to climb wall of worry. mayson has been hard for the, who. i think we continue to groind higher. again, have you big macro things coming up this fall. whether it's the debt ceiling or the fed they were. >> jim paulsen talks about how he thinks the tapering is going to happen. it has to happen. we will get a jobs numbers on friday, if we get a strong jobs number, how does the fed react on friday? >> i think it's ready for real growth. i think empg everyone, i think in terms of some of this activist investing activity you are seeing, i think that's
another positive sign, which people are saying, listen, we've had enough of kind of the codeine drip we have been on for the last four or five years. we really need companies to post top line growth and if you start to see top loin growth, especially with margin, profit margins this high, the market could really, i think rip here. so i view good news as good news and i think the taper is completely priced in right now. the surprised would be if the fed doesn't taper. so i don't think it's a big market event if the fed actually pulls back some. >> we will talk more to jason layout the program. when we come back, though, we will be talking and media matters. big dole in the space, including time warner, vodafone and verizon wire lchltz again, take a look at the futures as we head back to work after that holiday weekend t. dow futures up by 87 points. believe it or not, that's off the highs in the morning. s&p up thrown points. "squawk box" will be right back. it's what you love about her.
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its wireless business. cbs reaching an agreement with time warner cable. joining us, todd, the senior telecom analyst at hudson square research. good morning. here's where i want to go, vodafone-verizon for a second. this is a dole we have been talking about literally for a decade. is verizon late to doing this? it seems to me vodafone has done very, very well, frankly, verizon could have got this dole potentially five or ten years ago for a much lower price. >> yeah. that's a great question. it's the biggest question i have for verizon on this is, you know, why are you doubling down on the u.s. wireless industry at a point when smartphone penetration is starting to mature. i was going to deba it the growth driver for the last few years for the industry. you got competition starting to heat up. we got t-mobile and sprint, excuse me, we were both for the last five, six years, suddenly
start to get much more serious and do interesting things. t-mobile's case is certainly already having an impact. >> so a mistake there? >> it's too early to say that for sure. i would question, i think it's ricky they're doubling down. >> play domino's or chess, vodafone gets all this cash. they give some back to the shareholders. there is a view they become a target, potentially by at&t. you remember years ago, vodafone was going to boy singular, which became at&t wireless and was going to sell it being to verizon which they did own. if at&t boys vodafone, where does that put verizon now that they're $60 billion in debt? >> well, first, i'm not sure at&t will boy vodafone. at&t has talked about you're pine assets, but to me the european wireless industry is growing less than the u.s. is at this point. they are a little behind on the
4g upgrade. there is a little potential they could. it's a very competitive industry over there. i'm not sure it's a good source of growth rate for at&t at this point. >> let's talk about cbs, time warner cable. it is thought to be a takeover cable itself. >> yes. >> so this little dole has had bigger implications from inside time warner cable how they think about this stuff. why down they lost in. >> i think they probably won. >> time warner cable? >> they probably won a little bit. >> even though time warner cable's ceo came out and said, obviously, we didn't get everything you wanted. >> i suspect the fact that it went on for almost a month suggests that they got more than their share of what they wanted. >> how much down they're paying in. >> it's really tough to put a number against this, the original was, they were paying less than a dollar and supposedly the original asked what around $2, i suspect it's somewhere between those numbers. i don't know if i want to
venture an exact number. i would guess somewhere in the buck 50-ish range. that's really a rough estimate. >> if that's the case, though, who is more damaged by cbs haven't taken not off the air wave, off that cable system in those three major cities for a month? who winds up getting most bruised in. >> you know, we've seen a lot of these blackouts over the last few years. this one to me felt like it was not as big of a deal to the dmers. so i'm not sure time warner cable customers are that much upset. >> i think you are wrong. i think the next chance i have to get to verizon fios, i'm running. i'm not walking to do that. i think the issue is not what happened over the last month in terms of subscriber loss. it's over the next year or two years. >> as a competitor. >> the timing worked out as well as it could for time warner cable because it happened during summer reruns and before the nfl
season started. >> real quick, what does this mean in terms of the fc getting involved if future blackouts? >> i think in general, the fcc would rather have them sell and this one went on for almost a month. the fccs didn't really step in. >> it's almost congress has to get involved before something would change. >> are you worried you were going to miss homeland? >> i started worrying. >> there is not a single show that you missed. >> you were promised something that you are not getting. >> what did you miss in the u.s. open in. >> that i'm into. >> but didn't they put the tennis channel on in. >> they did. you can get all of it t. stuff that wasn't too busy. >> i watched a little for the first time, federer. he lost big. i know. yeah. >> only. we got to go. i am going tonight. i thought. >> no way? >> i thought it was federer. that was supposed to be the match. now, there is no match. >> i think i saw an anchor from
a major network that does the nightly news. >> really in. >> no. >> it wasn't a woman from the network that carries it. >> yes. >> that's what i think. i can see how you can get seats. >> tomorrow, i talk to one of the key physician behind the time warner battle, the man, himself, he will have answers. later this morning on "squawkon the street," we have an exclusive interview with bo mcadam. up next, though, former relations committee chairman, robert menendez will talk to us. >> that hearing on capitol hill, so far, there are have been strong grown arrows, the dow futures up 86 points. s&p just over thrown. "squawk box" will be right back. to make their money do more. (ann) to help me plan my next move, .
. >> the senate u.s. foreign relations is holding hearings on whether they should invade syria. robert men endez, thank you for joining us. this is a huge issue. i am wondering where you come down in all of this. >> well, based on the intelligence that we know and the consequences of inaction, i am strongly supportive of resolution giving the president
the authorization for the use of force. one to deter and degrade sizability to continue to attack innocent civilians, including the death of 400 children, two to sandy global message to eastern, for example the ayatollah is watching what we are doing and saying, will i be able to meet my mad dash for nuclear weapons for north korea having the dictator say the world will stand by and do nothing when fal weapons are used. so those are some examples of the consequences of inaction and i believe whole ultimately hear the case made today by secretary kerry, secretary haggle and the chairman of the joint chiefs of staff, general dempsey for both what happened in syria and why we node to act and hopefully that will be an opportunity for members and the world and our country to hear why this nodes to move forward. >> senator, no question what's
happened under the assad regime is terrible by every count. a lot of people have questioned, particularly some of the senators have questioned whether we have an objective for this and if we do give authorization, if you the congress gives authorization, whether that will mean we are drawn into a much larger conflict we are expected or foreseen. >> those are the legitimate concerns. first of all, i voted against the war in iraq. i don't cam to the use of force easily, but this has clear significance to our national security moving forward for the reasons i just stated before. i think that we have the wherewithal all to strike against assad's regime in ways that not only dramatically undermine his ability to deliver chemical weapons against innocent civilians, at the same time in doing so undermeans the
regime, itself. as to a broader war, the consequences of inaction will send messages to iran, hezbollah, to hamas, to north korea. to other actors within the region that they can act aggressively, violate international law and do so without consequence, i think inaction has a greater consequence within the region. >> senator, it sounds like if iran were to do something in the future that violated international law or if north korea were to do something that violated international law, then we'd have to go there as well, then is what you are saying in. >> well, first of all, on iran the congress has voted almost unanimously in sanctions against the iranian regime to stop them in violation of international law to pursue nuke clear weapons in the consequences are different. >> the nuclear weapons is enormous. we are already committed under a treaty as it relates to north
korea. so those are circumstances that we hopefully can avoid by acting in a way now that sends a global message that this can't stand. >> senator, we had a guest on last week. we talked about the man on the street in the middle east. not the elights in sending a message to the ruling class but to the man on the street and the suggestion was made we have no moral authority, no credibility. in fact, a missile strike of any sort would undermine our credibility, not raise it. what do you make of that? >> look, our long-term engagement in the middle east will continue to be a challenge, creating a rising economic opportunity for people in the middle east is one of our, has to be one of our long-term goals, something i have advocated for quite sometime. but to simply say, to stand back and let assad continue to streak against his citizens and 1,400
dead, over 4 hi, children to say i will strike again, it will be broader, the consequences of that will be far greater than the question of standing that you pose as it relates to the average person on the street. our engagement in the region has to be long term. our engagement in terms of lifting economic opportunity and hope for that region, along with other alloys has to be an engagement. that doesn't outer the responsibility now to act in this particular combens consequence. >> are there 60 votes in the senate and what happens if congress votes now? >> i believe that we will get there. i think senator mccain made a pretty clear statement when he said a vote against the use of force in this particular case would be catastrophic. i think the president will continue to make his case. so will his team. i think as the facts unfold, i think poem will understand the node for action. i think our resolution that we will ultimately see will be far
more tailored than what the administration sent us. at the end of the day, we'll strike the balance between the node to act and act in a way that meets our goals and not create and open ended boots on the ground long-term proposition. >> for, what are our goals exactly? is it ultimately regime change or is it punishment for using chemical weapons and if it is regime change, how confident are we that what we will be getting in return and replacement of the assad regime will be any more friendly to u.s. interests than what we have now. >> well, first of all, there are no great options here in syria. inaction has enormous consequences as i've stated, action at the end of the day will have hopefully some more positive consequences. from my perspective, the action to be taken is to dramatically denigrate the regem's ability to
deliver chemical weapons against its citizens. at the same time, while are you doing that, are you degrading the regime's ability to wage a broader war. our committee voted months ago 15-3 to arm vetted elements of the syrian opposition, elements we believe are moderate and would ultimately be supportive of the syria for all. and that's the end result i see us achieving. >> mr. chairman, thank you for your time. we will be spoking to for ron johnson, much more on that dole between microsoft and nokia coming up at the top of the hour. stick around, "squawk box" will be right back. .
. >> microsoft's big handsets, buying nokia. >> down our 66 has been interesting fumpbts. >> more of our interview with microsoft ceo steve ballmer plus insight from an analyst. time warner cable coming together for transmission fees in time for the fall premier. >> and the president making his case for military strikes in
syria. we'll talk to republican senator ron johnson, plus military analysis from general barry mccaffrey as the third hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc. first obvious business world wide. i'm joe kernen, becky quick and this morning jason trennert. you take his name and pronounce it backwards, it's tril trennert. he says it was cool when he worked at isi. now he works at chief investment strategyist at strategist, which is means nothing. more from jason still ahead.
first, though, becky quick who you wanted to come back today. you were gone long enough. have you done two before? how long did it take to get in the mode, a couple of days in. >> a couple of dies, you know, the first week, waking up a little later. >> you know the best thing for you about the vacation? what? >> you didn't have to lose the jumble every day. >> so glad to see you again. i didn't even practice while i was gone. i wanted to be fresh. i think it's jungle fatigue. >> we'll see what happens. >> i haven't seen you. >> you haven't lost in a month. >> let's start with the markets. maybe once. u.s. equities futures are looking sharply higher. up about 91 points for the dow futures. s&p futures up by 14 points. overseas in asia, you can see
things were strong there as well. the nikkei up 3%. the shanghai composite up by 1.18%. in your, in some of the early trade, you see red arrows, modest decline, not following along what happened in japan and here with our futures this, mo. in our top stories, microsoft agreeing to boy nokia's main handset for 7.2 billion. john joins us with more. >> yeah, becky. we got a lot more color on this dole, i learned they started coming together in february at mobile world congress in barcelona. conversations between ballmer and nokia came at the end of 2012. it's interesting. my understanding is the folks had a good idea this dole was happening in july by the time microsoft announced it's restructuring. i talked to ballmer early this morning. here's how he framed this deal. >> we really kicked this journey
off two-and-a-half years ago with a parter? ship with nokia to do windows phone and that partnership has yielded some very good results from literally nothing two years ago to 7.4 million windows phones in the last quarter alone. we have been growing 78%. but we know we have a lot to do. >> hard to believe that was three hours ago. still dark here in silicone valley. andrew says the deal doesn't make sense. the two countries were duplicateing efforts in areas like marketing and developer relations. they say it was making things worse. also, it became clear to microsoft they needed outside experience to make the devices part of this new device and services strategy work. the failure of the service perhaps crystallized that. nokia was already in the family. becky. >> you know, john, there are a lot of questions still running around.
andrew, does that answer your yes question? . >> a little of my question. microsoft was paying so much.for marketing. it seems like it was all from the same pochlt the question i have is value add when they took a seat on the board, down they tried to do this now, get the sort of across the finish line, before value act joaned the board? >> it's a good commonwealth i think they were julying a number of things. it seems they knew they wanted to (t this dole and ballmer was going to announce his resignation. they were probably thinking of timing issues with that. this is value acting floating around as well. it would be a lot to sort through. >> what did ballmer say about his departure when you spoke to him earlier, john? >> i didn't get to really get into it with him on that. they kind of said that he ned to go a couple minutes sooner than i expected. so. >> my question is about you.
i will go to you in one second. do you believe there was a special deal? it was a he man provision in that transaction that requires them to go along with it and obviously come to microsoft. how much do you think that deal is worth? >> i don't have expertise in that area. i will say my understanding is when the talks started about this transaction, it was not clear elop would necessarily go over to microsoft as the conversations got more detailed, it became clear that was happening. it also bell clear elop was going over. that wasn't built in from the beginning of talks that he was going over. >> by the way, we should give you kudos. you pointed out a week or so ago elop was someone as a potential successor to ballmer at microsoft. >> even a broken clock is right a couple times a day. >> john, thank you.
we will talk more about microsoft a little later this hour. in another deal news, cbs and time warner cable reached an agreement to end the month long blackout t. two sides have been at odds since the beginning of aupth when cbs and its sister show time were blacked out in los angeles, new york, my home, dallas and smaller markets. we will get an update from a reporter on all of this. one more dole, verizon agreed to pay $130 each number billion dollars to boy vodafone out of its u.s. wireless business. our cloaks in europe spoke yesterday to vodafone's ceo yesterday. >> this is a very large deem w. refortunate enough the size of the deal itself, allows to us return a large paern percent annual, 31% as you said to shareholders. even the remaining 21% is large enough to strengthen the company and allow under the circumstances to act sell rate our strategy. so the percent annual might look
small, but the amount of money i think is ro bust enough for allowing vodafone's credit for the future. >> i will tell you, they are the big winners in this transaction. we should have a programming note. don't miss it. local mcadam will join us at 9:15 eastern time on "squawk" on the street. >> the senate foreign reels will hold a hearing on secretary of defense john haggle and secretary of state john kerry will joan us. joining sus barry mccaffrey, retired general and president of mccaffrey associates. general, you know how out of the main stream a lot of the things you are saying i would imagine. i don't have to ask you any questions. but i'm going to. number one, you say there is for the way the president really had authority to do it because it's not a direct threat to the united statesment we are hearing from a lot of people it is a
direct threat. >> that's probably oun one of the lowest important things i'm saying. i'm grateful he went to congress. he had no support on this unilateral limited strike. not from the occupation, nato, the arab league, jordan and egypt denounced it. the public opinion polls aren't supporting it. >> if it wasn't a direct threat, he didn't have the ability to do it. >> well, i think the president has enormous latitude as commander-in-chief to do anything he wants external to the occupation. the question is, what will happen if we duct u conduct this strike? i think if he las the legitimacy of congress, at lowest it will have more credibility trying to influence assad's thinking t. bottom line is this is an internal civil war of fight to the death between a shiite minority supported by the christian, i might add, and what is increasingly an extremist
jihadist sunni uprising. and what should we do about it? that's really the question congress needs to take. >> to lose it, obviously, the other thing i was amazed that you said, if he doesn't get backing from congress and if we don't do anything, it does not hurt either the president's or the country's credibility whatsoever? >> i think the credibility to the u.s. is based on 2.3 million men and women in the u.s. armed forces, backed by the largest economy on the face of the earth and our value system. i don't think this necessarily translates directly into credibility with the iranians or north koreans. i might add we have little credibility on deterrence with the iranian that, i have concluded we won't take military action. >> you saw secretary of state kerry's impassioned speech, though. and what you are saying means
you are at least disagreeing with a lot of the points he made. when someone gases their own peep, there are some who say international law mandates that someone step up to the plate and draws a red line, says you cannot do that, because the world will not allow you to do that to your own people. you say, go ahead and do that? >> well, i'm sort of surprised be i the line of questioning. i think what i do say, categorically is that the humanitarian and moral case has been made more than adequately by secretary kerry and the administration. i also believe it's clear that it was the syrian government that carried out the stroix. the only question at stake is, will a limited military strike achieve our political purpose? and that i think is unlikely to be the case. we should arm, if we want to do this, we should arm the rebels, provide massive humanitarian support to millions of refugees
and then conduct a robust u.s. air and sea intervention. >> the rebel, even though we've authorized arming them, we have not done that, we had a hard time figuring out who the good guys are versus the bad guys. the cia has backed off of that. >> we got to the report richard everythingle is reporting 60% o are jihadist groups to include al qaeda. i think it's a real failure of policy to not aggressively arm that uprising from the start. we still, it seems to me, rather than conduct a limited in effecttual strike to go ahead and arm them if you want to allow these people to protect themselves. >> i agree, i guess dope down agree with you. bombs kill people. you are just as dead. there are atrocities being committed in so many different places around the world.
we can't be there for everyone. >> that is a real difference, saying, to think more about what the outcome will be is one thing because you might never do this strike because if you are not going, if it's not going to have a positive objective, will is no reason to stir the hornet's nest that can make it worst. >> if you will not take effective military action, you think it might worseen it, you shouldn't take military action. >> you are letting a guy get away with a horrific atrocity, there is no one else ready to step up to the plate. this has been what we have done in the past t. united states will dom forward, there is little kids over there saying where are those people in. >> well, i couldn't agree morement i think it's clear there are arab sunni muslim neighbors egypt and jordan won't take action at all. it's probable the turks won't intervene either. certainly neither nato nor the united nations will step up to the plate. so you are right, the question
being posed does the u.s. to take this up? if we do, it needs to be an effective operate operation with a strategy that works. >> general, a quick business question, you dealt with budgets before, what is the cost of a strike like this ultimately lock like? >> well, firing a couple hundred tomahawk missiles not much. they're several million bucks a missile. the question will be, does this thing escalate? assad gets a vote. does he attack israeli? does he use chemical weapons two days later on his people? then are we forced then to keep on the up escalator? i think it's likely to be the outcome. if we get involved in a significant air-sea campaign in syria, then that may b well be a significant fact. remember, the armed forces under sequestration, taxi down to tevend of the runway and back
now because of budget cuts. >> wow. general, thank you. we will leave it there. we appreciate your time this morning. we know how early it is out there. sort of. there yeah. >> anyway, see you later. >> still ahead, we have much more on the deals of the day. next, we get an upgrade on the agreement between time warner cable and cbs. then the microsoft-nokia dole t. impact on both companies, later, president obama's case for military strikes in syria. we will talk to ron johnson, member of the foreign reels committee. ahead to a break. we are looking at a live shot of the san francisco oaks e oakland bay bridge now opened after a $6.4 billion renovation and years of delays. i remember that traffic on the other breckenridge. so hal louia, this morning.
neither company would reveal terms of the agreement. the time warner cable bought the rights to act as show time any time and vod for doctor bs stations. the cable giant did to the get automatic access it wanted into the online content to digital distributors. the ceo writing to employees that things worked out in his favor. saying quote, with rereceiving fair compensation and we also have the ability to monetize our content going forward on all the if you developing platforms that are right now transforming the way we'll people want tele56. analyst craig move it agross, saying you can believe it was much closer to the app than time warner's bid. they echo, quote, hard to believe this isn't a victory. he predicts change to give cable companies more power saying, quote, the disequilibrium that currently exists is not
sustainable. time label is calling on congress to re-assess retransmission consent rules, saying they're the primary reason cable bills are rising. he said, while we certainly didn't get everything we wanted. ultimately, we ended up in a much better place than where we started. the fcc weighed in. point. ed fingers back at the media saying media companies should accept, shared responsibility. okay, that i are probably locking ahead to more potential battles, including doesny's abc contract which expires with dish later this month. we'll have to see if that creates another warp. >> tomorrow, we will talk to the key physical behind the time warner cable battle, cbs chairman and ceo les moonves will join us. coming up, russia playing a critical role in most diplomacy as the u.s. debates whether to
launch strikes. president obama set to leave later today for a european trip that will culminate in the g 20 meeting in santa petersburg, russia. >> that would have been an interesting thing. up next, we will talk to russian reels with william browder, he is the largest foreign investor in russia until 2005 when he was denied entry into that company. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
. >> welcome back. the relationship between u.s. and russia is at a new low because of sarp disagreements. william browder is the founder of capital management. you have a lot of experience in russia him help us to try to understand this. if we do strike, if there is some form of missile strike, how does russia respond? >> well, i think the first thing you have to understand is that some, why is russia doing this in the first place? and i would arc you that some, russia has been a declining power in the world for a long time. so the only way they the stay relevant is by taking an oppositional standpoint on pretty much any international issue. they've done that in the past with eastern, north korea. they're doing that with syria right now. i would arc you strongly that as much as they want to stay
relevant in international relations, they're certainly not going to war on behalf of syria if they strike. they will make a lot of noise. >> the noise is aimed at creating more instability because it does what? indegrees oil prices for that? >> well, it does two things t. first and most important thing is that putin wants to have a seat at the table. he can only have a seat at the table, he's a member of the security council. he can only have a sight when he says no and everything else is saying yes f. he says yes, he is like any other member of the security council. there is a strong secondary benefit to russia, the more instability in the most the high ter oil price. as everybody knows, russia is basically an oil company. it helps this emto have high oil prices. i don't think oil is the primary objective. it's national pride and relevant, which is why putin is doing what he is right now. >> do you think the president should go to the g 20 mote
income russia? >> the g 20 meeting is about the g 20,est not about russia. from what i understand over the last couple of days, he's made a bold decision, which was to two to the g 20 and to meet with human rights groupt and lbgt groups, which is a very big slight to putin who is making his business to snuff out human rights and attack gays. so i think if he goes to the g 20 and does that, he has served the purpose and has the opportunity to do what is necessary, which is to talk about global economics with the g 20. >> mr. browder, what is the source of the -- between president obama and vladmir putin, it seems the relationship was much stronger, is it just a function of being relevant that putin is getting at or is there something doerp at work here in.
>> well, there is one thing that's important to understand what is going on in russia. which is that russia has run what i would describe as a kleptokratic regime where government mensters are taking a lot of money for themselves, not doing tore government min sterile work. you can do that for some period of time without people knowing. but the quality of life in russia is now decarolinaing. you have a situation where hospitals aren't being staffed, roads aren't being built, sit-coms are not being properly functioning. as a result of that, people are angry in russia. so pout putin has got to do something about it? what you do is you create a foreign enemy. that's effectively what he's done. i don't think there is personal animosity between him and anybody. he's a clever guy. he said, if my people are mad at me, i got displace or anger
towards somebody else. at the moment, he is displacing it towards america, which is what we are seeing right now with syria, but in a lot of other things. >> why don't you think he ultimately acts? the reason i ask, 23 are having a debate. we as a country will lose credibility if we don't. we will be the boy who cried wolf. why will he not be the boy who cried twofl? >> putin has never threatened to attack us if we attack them. all he is saying is we disagree with this. we don't think it should happen. we will be angry. he mit move a few warships in the area. russia doesn't have the resources to go to war with america over syria. it's not going to happen. >> we will leave the conversation there. bill, thank you for joining us from london. >> i thought it was bob kraft for a second. >> i was. kleptokratic. >> bob kraft. >> the super bowl ring, he still has it, right? >> he showed it to him. it disapored.
>> that's a metaphor. are you talking about if super bowl roing, is he, good? >> kleptokrat ec. >> you talked about that on our show. it got picked up. >> three, four years ago. that's not news, i don't know how that works. >> who is paying attention, i suppose. >> let's talk also about microsoft, agreeing to by nokia's main handset business for $7.2 million. joining us is brendened barn cam, senior analyst. brendan, what down of this dole? is eight good one for microsoft in. >> no, i am skeptical it will work ut. it will be very diluted, the mar jens, probably about 400 basis points by our cal calculation. i think what you are seeing is microsoft having to go boy a new oem partner to keep its windows business afloat. >> ballmer said he wants to make this a devices and services company. you got to find some way to do that, i go snes. >> i guess find some way to do
it. we don't have that much track record to do it. that's a high margin of business, they have been a loader in. the only way they solingly continue to be in it going forward is being in devices and services, with i is a much slower margin of businesses. if that's the profile of what the company will lock locate, i think it will be hard for investors to get exited. >> a $7.2 billion dome. the worst is in the just baum mer who is making the decision. what does that make you think about the stock? >> sew, it's the reason we were not all that enthusiastic. yes, maybe you get improvement. fundamentalally, this is the board's calm. it's been the bird's call to make the dole t. board has a different view of where ikia is doing and a lot of second investors do. >> you look at who will be the next ceo of microsoft, you think the current ceo of nokia is the right player. you think he is now in the load
bus of this dole? >> i think you'd have to assume he is in the lead if you think what the board has talked about. the board says they'd like to have somebody that understands the business. elop knows it well. they want somebody to understand devices. i don't think he brings a real strategic change in innovation that you really need at microsoft and really, the hopes that folks have there might be restructuring. they metro detroit unlock shareholder value. you got to assume it's off the table after this move. >> who would be a good candidate in your opinion? >> i like john at ebay. he has consumer and comber prize experience. i think he would bring potentially a fresh outside perspective which is what they need right now. >> the board did move to add a new shareholder just last woke. this is something they announced the activist shareholder would come on, someone that owned less tan 1% of the company.
how much pressure is there building from the outside for microsoft to really shake things up? >> you know, there is an interesting move, because they've had other activists to get involved before. they kept them at arm's length. i think hardly what you sew with them, maybe the admission that they will spend less an less time involved with the taken, so they know and will have to tran six at some other hands, i whob very surprised the activists end up having a huge sway on this company. i think they will let them have a bird seat. they will listen. it's a very small bird tightly controlled still by bill gates and stove baum mer. >> brendan, we have been critical of this transaction all morning, this deal is being paid with cash outside of the country that can't be repatriated. or if they can, it would take huge tax hit. when you think of the cash microsoft has on hand, why do we think is a bad way? would you be happier had they dividended this back with a
humid tax-it? >> what you will see with margins, you probably could have. you might have to run the numbers. aside from that, you can't tell me there isn't anything else in the world that would take her to margins down several percent annual points. >> would you prefer rim? >> i think have you problems with those companies, device, microsoft has had limited success the first time out with devices, zwrenlly, not that great with devices. >> would you kill the whole multi-platform? >> say that again? >> would you kill the whole mobile platform, say worry not good at this, worry talking our ball and going home? >> i this i the best thing is to spin that out to shareholders. >> thank you for joining us this morning. >> thank you. when we return, we will talk more about what is happening with the markets. u.s. equity futures are up sloitly higher. the dow is up 85 point. we will be speccing to pimco's
mohammed el-erian right after this. . are [ male announcer] surprise -- you're having triplets. [ babies crying ] surprise -- your house was built on an ancient burial ground. [ ghosts moaning ] surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees. ♪ it's not rocket science. it's just common sense. from td ameritrade.
nearly 5.2% stake in j.c. penney. our own david few reported two weeks ago bass had taken a large position in the retailer. jardin corporation is buying yankee candle from dearborn partners for about $1.75 billion in cash. he owns sunbeam, kolman and mr. coffee. executive officer anthony zook resigns because of apparent medical issues. they said fisher will be taken over as ceo following a proxy battle over the marketing of the obesity drug. >> given everything that's been happening with syria. joining us from newport beach is mohammed el-erian. he is pimco's ceo and chief investment officer.
thank you for joining us. >> good morning, becky. >> why do you think the market is higher is this because syria is put on the back burner or people are coming back from vacations? is there something else at play here? >> both europe and asia give us an insight. with recaptureing up, catching up to two bits of fuse, one is that the strikes on syria are going to be delayed, second the risk of escalation is lucky to be reduced. so we are responding to indications if you like that the destruction, the potential destructions are likely to be less than what the markets not last friday. >> in terms of syria, are you somebody who has a lot of experience in the region, both from your time in egypt, also your time at the world bank, what do you think we need to do here from a global perspective? what down that means for the markets in. >> so i really don't know what we need to do.
this is an awful human tragedy, not just the people who have died and the people who have been injured, but massive refugee flows. what i do know is the impact on the marketment three things to remember here. first, syria on stand alone is not that important. it's not a big economy. it doesn't really produce anything that is impactful. it's oil production is 50,000 barrels a day. >> that is a rounding error. secondly, syria has massive effects. if you list the companies that are somehow connected to the tragedy, it's a very long list, israel, iran, iraq, saurks bahrain, turkey. it goes on. so the network effect is what matters, the third thing is the oil price is the least distort ed market variable to look at. that's what we care about because that's where you get the impact on global growth.
>> great. mohammed, some people like those numbers. i think it's time for you to update your global view of global growth maybe it's normal. maybe it's a little better. i said it kind of like you did. say it for me. >> so there is no doubt that the global economy is healing. >> better. you got to upgrade it. you have been too negative rnlth i think. >> no, i think on the economy, we have been right and the key issue you've raids earlier today, joe, is given that the fed is likely to taper and given we may see this as early as september, the question is not just what it does and when it does it, but why, the hope, you said it this monk, the hope is that the economy is strong enough for them to exit for good reasons. the tern and we have that, that the economy is healing. it's not as an escapable velocity, therefore, they will be exiting because they are worried about the collateral
damage. that's what the marnth has to look at the balance for the good reason to exit and the bad reason to exit. >> we have to hope it's time the wedge comes out, but the economy has come up enough to where the market is not that overvalued without the fed wedge. >> so, joe, i would have expected you to address the new normal to what you believe it is the fake normal. you have been critical of the feds. >> now i want them out. i think worry ready. i'm xoitd about 3%. some days. >> and the issue you have to lock at, joe, what else do they do? what's the knockout? how do they qualify? remember. they want us to focus on the journey. the market will want to focus on determine nal values. it's that conflict that will play out in the markets in the weeks and months to come. >> homeland, thank you. great talking to you. >> coming up, president obama making his case to congress for military intervention in syria.
foreign relations committee. senator, thanks for joining used to. you don't know, is that true, which way you will vote? >> no, joe, therer so many unanswered questions. the hearing will be important. tomorrow will have a secure briefing. my question is really what is the goal? what are the specific objectives? what are the strategys to achieve those goals? what is our long-term commitment? what are the repercussions going to be? are we prepared for those? do we have the capablies? a lot of unanswered questions. this is, i'm glad to hear the debate finally occurring in this country. what we node to do with syria. one of the things that concerns me is the real rational from my standpoint t. real national security interest is the fact we have chemical 20 ponce stock polys in syria. we have rebels infiltrated by elements of al qaeda. what happens if the weapons hand
in the wrong hands. to me, that's the real key. it doesn't seem like the administration is talking about that. >> you want a clear objective. is there a clear objective case that could be made in your view where it would have you support it or is it, are you suspect that it could convince you? it sounds like you will not vote for it. >> no. i wish the president would have been making the case two-and-a-half, over the last two-and-a-half years. what a serious situation syria is. we have sewn 100,000 syrians slaughtered. i heard reports up to 2 million refugees flowing over the borders to stabilizing states like jordan and lebanon. this is not only a humanitarian crisis, getting back to the point there are huge chemical weapons stock policy, that i are a direct national security threat to the united states if they fall no the wrong hands, this has been a rolling disaster for a couple years. we are coming to the table late. as a result, our options have
been severely limited. there were never 18 good options. but we're in a worse position today. i want to make sure worry not in a worse position tomorrow if we carry out actions that aren't well thought out. with we don't plan on what happens after he act. >> senator, what do you think the repercussions are if we don't act to the credibility of the country, to the credibility of the president? >> right. i'm highly concerned. i think this president by not loading has backed america no a corner. so if in the end, he gets approval by corporation it will probably be bus of that. i think congress will have the responsibility to make sure america doesn't lose credibility. but again, i am hoping through these hear through the discussion with the american poem the president can make strong case. and we can get america behind him and behind the actions that quite honestly, nobody wants to take. we prefer not having being involved here. america is a world super power.
if we don't load, now things happen. >> that is reality we all have to grand prairiele with. >> down the president made the right decision in putting it to congress? >> well, at the point intime he dithered. he didn't act decisively off the bat. basically, with all the leaks, with all the discussions going on, yeah, i didn't see any reason for quick action. again, because he has not made the case yet to the american public, he will be in a far better position if he makes the case and convinces the public and congress. >> what a difference a war makes in terms of iraq. because we now have president olon in france is now in trouble domestically because he's ready ogo without approval from parliament. can you believe that? france is ready to go. think of iraq. now france is ready to go.
we're not. this is rife with so many weird coincidences and ironies. joe, joe, it's a lack of leadership. during this administration. and a real key problem is you mentioned iraq. the fact that we did not negotiate with a status force agreement so we had some stabilizing presence there, so we can stop the easternian overflights, iran is supplying syria. we have -- our reset with russia has been a failure. they have been sploiing -- america has got to lead. >> if we were worried about iraq and wmds getting into the hands of the terrorists, the terrorists weren't even around. now they're right there. if we do something the stock polys we know are there. we saw evidence of them. it's obizarre, senator, we got to run. i don't envy anyone. it's god to be a part of the
media to talk. but either the president or members of the congress, really, and the rest of the world, it's a very difficult thing to figure out. thanks, senator. when we come back, we'll have c news of the morning. we will talk microsoft, nokia, vodafone and more. don't miss "squawk box" tomorrow morning because it is the start of the nfl season and we will talk to the owner of the patriots robert kraft and tom brady. >> tom brady? wait. >> and new york jets' owner woody johnson and jonathan tish and the commissioner, himself, roger goodell. whoa!
before we get to the new york stock exchange, and we will talk about the lead story, page 6, about the economist neural rabini who used to be on the show a lot, and when i mentioned his reputation as a partyier, he would get mad. i don't think that he would come on after this. >> page 6. >> you have not seen this. >> no. >> and this is -- anyway. he is being forced to remove his
giant hot tub from the roof of his bachelor pad in new york. it was large enough to hold ten. but he didn't get approval for it. now, anyone who would get in there if you had a little open cut with the kind of people that he -- anyway, he is -- >> hugh hefner? >> worse. i mean, you would need -- >> come on. >> a full body like sleeper or full body condom to go in that thing. >> i think there is a 12-person one. >> it is called a vagina walled downtown loft. i had to be corny to make it say it, but at 6.66, he said he is
going down more on the s&p. he would not come down. it is not my fault. it is the "new york post." and now down to the new york stock exchange where, jim, you have a little jacuzzi foam right here. and did you just -- have you been to one of those parties, jim bow? >> no. no, and i have to tell you that the description of it, i won't say it is apt or not, but i will say it is early for that description. early in the morning. >> better and early -- >> the guy has so much fun and being wrong must be the greatest thing in the world. >> oh, is he? great. he had been. >> no, he is early. he is early all of the time, and he is late, and he has the tub. my hats off to him. him and jimmy sachs. >> and he will be on "closing bell" today and we will see if there are any questions about the hot tub. >> well, he is a nice man and everybody who knows him loves him so i hate to slag him.
but i will never get tin vit. that is the way it is. >> no, you are are not, because you are a much better looking, and he doesn't need the competition. what's the deal like today? >> well, i think that verizon slammed down is an opportunity, because the deal is additive. i want to sell nokia, and i have been liking them and got a good pop. steve ballmer, and what did you get here? steve likes the phone. i saw him use it at the college reunion and i would not have bought the whole company, because i liked the phone, and it is like vikram with the razor. he liked it so much that steve bought the whole company. >> can you see it? >> goodwill $7 billion. >> well, take it now or do you wait? what is the accountants want, this morning? well, microsoft had to do something, because it was flailing. so it decided to let samsung and
apple have the whole game. >> we are going to use this music when we talk to you, jim. >> all right. i'm getting in the tub right now. >> our last word in a moment. [ male announcer ] let's say you pay your guy around 2% to manage your money. that's not much, you think. except it's 2% every year. go to e-trade and find out how much our advice and guidance costs. spoiler alert: it's low. it's guidance on your terms, not ours. e-trade. less for us. more for you.
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now, we recoming up at the top of the hour, and we want to thank our guest host jason trinert. >> thank you for having me. >> and first day of a long break. >> 3 1/2 months here to go, and strap yourselves in. >> that does it for us now, and it is time now for "squawk on the street." good tuesday morning. we hope you had a great summer and labor day weekend. welcome the "squawk on the street," i'm carl quintanilla with jim cramer and david faber from the new york stock exchange. a shock wave of corporate deals involving tech and telecom, and futures like it when we kick off a new and treacherous sometimes month of september. the 10-year yield is jumping to 2.85, and